Bottom line: this isn’t theory or conjecture anymore. Every shred of objective evidence suggests that the dollar’s dominance is coming to an end.It appears the sea of de-dollarization has reached the shores of Europe. With Australia and UK having already moved in the direction of joining the China-led AIIB, The FT reports that France, Germany, and Italy have now all agreed to join the development bank as 'pivot to Asia' appears to be Plan B for Europe.
As Greg Sheridan previously noted, "the saga of the China Bank is almost a textbook case of the failure of Obama’s foreign policy," but as The FT concludes, the European decisions represent a significant setback for the Obama administration, which has argued that western countries could have more influence over the workings of the new bank if they stayed together on the outside. As Forbes notes, this leaves Obama with 3 uncomfortable options...
As The FT reports,
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Eventually the numbers of dollars being dumped by both east and west will no longer be abel to be secretly stored by the Fed in some jinned up phony accounts austensibly in Belgium. Then they will flood into the US economy at breakneck speed, inflation will soar and confidence in the FED and the markets will.tank overnight. There won't be enough wheelbarrows.
ReplyDeleteAgreed, as soon as the people realize their actual value, it is doomsday, but remember the Vietnamese piaster was still trading on April 30th in Saigon, though worth little.
DeleteHe is correct. We have only exported deflation onto emerging markets & oil producers. It will, however, return to us in the form of inflation. Meanwhile, the rest of the world will flee away from our "In God We Trust" dollar.
ReplyDeleteBelieve so.
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